ECON 1 Lecture Notes - Lecture 13: European Cooperation In Science And Technology, Unit, Variable Cost

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Short term- a period too brief for a firm to alter its plant capacity, yet long enough to permit a change in the degree to which the plant"s current capacity is utilized. Long term- a period long enough for a firm to adjust the quantities of all the resources it employs, including plant capacity. A firms cost of producing a specific output depend on both the prices and the quantities of the resources (inputs) need to produce that output. A plant capacity which is fixed will have a different labor-output from a plant which is variable. Total product (tp) is the total quantity or total output of a particular good or service produced. Marginal product (mp) is the extra output or added product associated with adding a unit of a variable resource, in this case labor, to the production process. Marginal product = change in total product.

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